Enter the value of next year’s dividends per share, the rate of return, and the growth rate expected for the dividends to determine the stock price.

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## Share Price Formula

The following formula is used to calculate a share price.

- Where SP is the share price ($)
- D is the dividends per share ($)
- rr is the return rate (%)
- g is the growth rate (%)

## Share Price Definitoin

A share price is defined as the total cost of 1 share of a given stock or security.

## Share Price Example

How to calculate share price?

**First, determine the dividends per share.**This will be the dividends per share of the upcoming year.

**Next, determine the return rate.**Determine the average return rate of equity of that company.

**Next, determine the growth rate of the dividend.**Calculate the growth rate of the dividend year over year.

**Finally, calculate the share price.**Calculate the present value of the stock using the formula.

## FAQ

**What is a share price?**

A share price is the current present value of a given stock. The formula above is usually used to calculate the intrinsic stock value, since the actual stock value in the market is not always consistent with it’s true value due to speculative trading.